Flexible latent variable models on graphs: Laplace approximated inference for multiview network data

Abstract

We propose a novel and flexible nonlinear approach for dimensionality reduction of large-scale multiview network data and derive its theory. The (linear) predictor incorporates observed covariates (edge-specific, layer-specific, and global) and Gaussian latent factors. Inference is conducted via the graph Laplace approximated maximum likelihood estimator. Letting $K$ denote the number of network layers and $n_V$ the number of nodes, we derive asymptotic theory under two regimes: (i) $K \to \infty$ with fixed $n_V$, and (ii) double asymptotics $K, n_V \to \infty$, establishing consistency and asymptotic normality for local and global parameters, with distinct convergence rates. In an application to the gravity model for commodity trades, we use a zero-adjusted Gamma distribution with latent factors and observable covariates (e.g.\ distance, tariffs, common language) to capture excess zeros, skewness, and unobserved heterogeneity. Synthetic and real-data exercises show that our approach outperforms the routinely applied Poisson pseudo-maximum likelihood estimator with fixed effects. We complement our theoretical and empirical contributions with open-source R/C++ routines and a novel strategy for starting values selection.